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The
National Retail Federation expects retail sales should rise this
year by 4.4% over 2025 to $5.6 trillion, based on a new model
developed in partnership with Oxford Economics, an independent
economic advisory firm. In 2025, retail sales increased by 3.9%
compared with the previous year, the group said.
The 2026 sales forecast exceeds the 3.6% average annual sales
growth over the past 10 years, excluding the pandemic period
from 2020 to 2022 when sales growth was outsized.
The forecast excludes sales from auto dealers, gas stations and
restaurants.
“The U.S. economy was a bit up and down in 2025,” Mark Mathews,
chief economist of the National Retail Federation, said.
“However, the one bright spot through these ups and downs was
the consumer whose continued spending was a key economic driver
in 2025. We expect this strength to continue in 2026.”
Mathews noted that NRF is monitoring the Iran war, which is
sending oil and gas prices up. Oil prices have surged nearly 50%
since the Iran war began, and gasoline prices are following
close behind. But Mathews said the forecast could be revised in
coming months if the war starts impacting retail sales.
There are clear warning signs of more challenges to come. On
Wednesday, the Labor Department reported that U.S. wholesale
prices came in at 3.4% in February — hotter than expected —
driven partly by a sharp increase in food costs. The price gains
happened before the U.S. and Israel attack on Iran pushed energy
prices sharply higher.
NRF's solid sales forecast comes as consumers' mood has been
downbeat, but the group noted that sentiment has been
historically disconnected from actual spending. What underpins
spending has been wage growth, household balance sheets and a
solid employment market, NRF officials said.
The trade group noted that labor market conditions are expected
to weaken, but they believe the unemployment rate should remain
below 4.5% this year.
Mathews added that the spending outlook is still bifurcated
between higher- and lower-income consumers, with higher-income
households driving the majority of growth in spending across the
retail spectrum.
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